How To Pay Off Student Loans: 9 Helpful Tips

Student Loans

Student Loans
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Fees Must Fall protests have flared up in places following the Council for Higher Education’s recommendation of a 6,3% fee hike in tertiary institutions in 2017.

But the fees are eventually set for next year, applications for student loans are likely to be a priority among many prospective students. And if you’re a graduate trying to repay a student loan, you know getting shot of this debt is no walk in the park.

Motshabi Nomvete, technical marketing specialist at financial services provider PPS, says graduates face several challenges when it comes to paying back their student loans.

“There are many reasons for this, including the high cost of education, the general increase in the cost of living and poor management of personal finances due to the lack of financial education,” she says.

According to watchdog NGO Africa Check, the University of Cape Town is the most expensive SA varsity when it comes to the cost of a Bachelor of Arts, a Bachelor of Commerce and a Bachelor of Science degree. Medicine is first on the price list, followed by actuarial science, business science and commerce. First-year fees all top more than R60 000.

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Meanwhile, the government’s biggest student financial aid, the National Student Financial Aid Scheme, (NSFAS) is owed R21 billion in loans.

NSFAS chairperson Sizwe Nxasana cautioned earlier this year that debtors could end up blacklisted.

“It is important that graduates who do take student loans are aware of the costs involved and make sure they are informed about how to structure a repayment plan,” Motshabi advises.

The sooner you pay off your debt, the sooner you can be financially free and plan the rest of your life.

Motshabi offers the following tips to help you avoid the debt trap while you repay your student loan:

• Aim to pay off the loan as soon as possible.

• Begin by drawing up a budget as soon as you start earning a salary and incorporate loan repayments into your monthly expenses.

• Understand how the loan is structured and keep track of the loan by knowing the balance, the interest charges, and repayment status at all times.

• Don’t be tempted to spend money on luxury or trendy items.

• If you battle to find a job, contact your creditors and inform them of your situation so alternative repayment arrangements can be made.

• Don’t incur more debt while you pay off your loan.

• Stay in touch with the lender by informing them of any change of address or contact details (some lenders penalise borrowers if they fail to keep them informed of their current situation).

• Keep the end in mind and stay focused.

• When in doubt, seek the advice of a reputable financial adviser who will assist you with the entire process.

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